LONDON/BEIJING (Reuters) – Chinese firm Tsingshan Holding Group has been buying large quantities of stainless steel ingredient nickel on the London Metal Exchange (LME) to supplement its own output, two sources familiar with the matter said. They could not specify the amounts Tsingshan has bought.
Nickel prices slid to their lowest for the year in the second quarter as investment funds sold on the expectation of slowing demand from Chinese stainless steel mills as economic activity came under pressure from the U.S.-China trade war.
But as unexpectedly higher demand numbers started to trickle out, the same funds rushed to cut their bets on lower prices.
In the middle of that, sources said, Tsingshan bought heavily and the market started to worry about top producer Indonesia banning shipments of ore from 2022.
“Tsingshan has been buying on the LME, they are short of nickel because stainless steel production didn’t fall as people thought it would,” one nickel trading source said. Tsingshan did not respond to Reuters’ requests for comment, via phone and email.